Advertising Competitions in Social Networks

Masucci A.

Silva Allende A.

In the present work we study the advertising competition of several marketing campaigns who need to decide how many resources to allocate to potential customers to advertise their products through direct marketing while taking into account that competing marketing campaigns are trying to do the same. Potential customers express a rank-scoring rules for each marketing campaign according to the offers, promotions or discounts made to them. Taking into account her intrinsic value as well as the peer influence that she exerts over other potential customers we consider the network value as a measure of its importance in the market and we find an analytical expression for it. We analyze the marketing campaigns competition from a game theory point of view, finding a closed form expression of the symmetric equilibrium offer strategy for the marketing campaigns from which no campaign has any incentive to deviate. We also present several scenarios, such as Winner-takes-all and Borda, but not the only possible ones for which our results allow us to retrieve in a simple way the corresponding equilibrium strategy.

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